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UBS to hold talks with Michael Klein to terminate Credit Suisse investment bank deal

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UBS to hold talks with Michael Klein to terminate Credit Suisse investment bank deal

According to the Financial Times report on Tuesday, UBS is preparing to negotiate with Michael Klein to end an agreement that would have given the Wall Street dealmaker a significant stake in Credit Suisse’s investment bank.

This development comes after UBS agreed to acquire its Swiss counterpart, Credit Suisse, for 3 billion Swiss francs ($3.23 billion) in stock on Sunday. As part of the deal, UBS also agreed to shoulder up to 5 billion francs ($5.4 billion) in losses, in a bid by Swiss authorities to prevent further market disruptions in the global banking industry.

Michael Klein, an experienced dealmaker, had plans to merge his advisory firm with Credit Suisse’s investment banking division to form a new standalone business called CS First Boston. If the deal had gone ahead, Klein would have taken charge of the New York-based company.

According to sources familiar with the matter, UBS has appointed a legal team to explore the most cost-effective way to terminate the agreement between Credit Suisse and Klein. The Financial Times reported on this development.

UBS declined to comment on the matter, while representatives for Credit Suisse did not respond. Michael Klein could not be reached for comment. However, a source close to UBS reportedly stated that they believe Klein is selectively choosing what parts of the contract to enforce, and that the deal was agreed upon when Credit Suisse was under duress, which is no longer the case.

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